Disk Drive Arrays, The RAID Market Rises Above $13 Billion in Sales, Producing Lucky Winners and Unlucky Losers.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Nov. 23, 1998-- DISK/TREND's new market study on disk drive arrays, popularly known as RAID subsystems, confirms that the market is continuing the pattern of growth established during the 1990s, but it also indicates that some segments of the array market are distinctly more prosperous than others.

Disk drive array worldwide unit shipments are expected to rise 24% in 1998, with over 1.3 million arrays of all types. On the other hand, sales revenues are forecasted at $13 billion for the year, representing a more modest increase of 13.4%. RAID systems designed for use with networks and midrange systems generate 71% of the total disk drive array sales revenues, and are seeing the strongest current increases, with 1998 sales estimated at $9.3 billion, up 18.9%. Arrays for mainframe computer applications, with 27% of the total array sales revenues, are having a relatively good year but are expected to gain only 1.4%, to $3.6 billion.

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     Here are other highlights from the 1998 DISK/TREND Report on disk
drive arrays:

--   Disk drive arrays designed for use in network server and midrange
     system applications have a strong lead in current array sales
     revenues and dominate unit shipments. Network/midrange system
     arrays are expected to provide 94% of 1998 worldwide array
     shipments, boosted by growing penetration of the expanding open
     system server market by disk storage subsystems with RAID
     capability.

--   The RAID business is tough on manufacturers which cannot find a
     way to secure a significant market share. As the disk drive array
     business has steadily grown in size during the 1990s, the list
     of participating manufacturers peaked during 1995, with 179
     companies offering disk drive arrays under their own name. The
     new report indicates only 127 manufacturers remain in the disk
     drive array business in 1998. IBM, Compaq Computer and EMC were
     the leaders in worldwide 1997 sales. 75.6% of the existing disk
     drive array producers are headquartered in the United States, and
     U.S. companies produced over 90% of the 1997 revenue total.

--   The demand for disk storage capacity used with mainframe
     computers has grown throughout the 1990s, but the average
     price-per-megabyte for high-end disk drives is decreasing even
     faster, depressing the long term outlook for disk drive array
     sales revenues in the mainframe market. After a slight increase
     in 1998, sales revenues and unit shipments of mainframe arrays
     are expected to gradually decline through 2001, despite increases
     in the total amount of disk capacity provided, as networks based
     on open systems continue to invade mainframe territory.

--   The most popular type of disk drive array configuration is the
     complete subsystem, sold by the originating manufacturer with
     disk drives and all other necessary equipment, ready to install.
     Complete subsystems generated 47.1% of all disk drive array
     shipments in 1997, growing to a projected 52.3% share in 2001.
     Array controller boards, used by system manufacturers,
     integrators and do-it-yourselfers to assemble complete array
     subsystems, held 44.1% of the 1997 array total, but are destined
     to decline. The 2001 share for board-level array controllers is
     forecasted to decline to 40.1%, as some disk drive arrays
     designed for personal computer networks start to use low cost
     array chip sets which can be mounted on system motherboards,
     eliminating the need for separate array controller boards.
     Software based array products are expected to hold 7.7% of the
     2001 market, with usage concentrated in mirrored disk, or RAID-1,
     applications.

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In addition to individual revenue and unit shipment projections for disk drive arrays in four separate product groups, the DISK/TREND Report provides a review of array system considerations, a checklist on array selection for prospective buyers, competitive market shares of manufacturers, and a review of competing data storage technologies. The report also contains basic product specifications on 665 disk drive array models and profiles of 141 existing and former manufacturers of disk drive arrays.

The new study on disk drive arrays was released as part of the series of four 1998 DISK/TREND Reports, detailed annual business reviews of the worldwide disk drive industry published by DISK/TREND, Inc. Separate reports on rigid disk drives were published in June, removable data storage in July, and optical disk drives and libraries in August.

The 1998 DISK/TREND Report on disk drive arrays is priced at $2,215. Subscriptions to the complete 1998 DISK/TREND Report, including all four product areas, are available at $7,616 by contacting DISK/TREND, Inc., 1925 Landings Drive, Mountain View, CA 94043, or through the company's Web site, http://www.disktrend.com.

For additional information, see the attached shipment summary, or call Jim Porter or Bob Katzive, 650-961-6209.

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                          DISK DRIVE ARRAYS
                  WORLDWIDE SALES REVENUES ($MILLION)

                              ----------------Forecast--------------
                       1997
                     Revenues   1998      1999      2000      2001
                     -------- --------  --------  --------  --------
Single user
 systems                 32.7     35.6      38.0      39.4      41.6

Networks/midrange
 systems              7,844.1  9,326.0  11,049.2  12,159.1  13,191.8

Mainframe
 systems              3,556.8  3,607.6   3,514.1   3,227.5   2,953.9

Specialized high
 performance systems     97.2    103.5      93.4      96.2      97.4
                     -------- --------  --------  --------  --------

TOTAL, ALL ARRAYS    11,530.8 13,072.7  14,694.7  15,522.2  16,284.7

Source:  1998 DISK/TREND Report